Papers Pick a Midterms Winner: ‘Free Trade’ Agreements

Whatever lesson you want to draw the midterms, the nation’s top editorial pages want to make one thing perfectly clear: Now is the time to move on bipartisan, corporate-friendly “free trade” agreements.

“A time for free trade,” was the Washington Post‘s November 7 headline. “The Democratic majority in the House was heavily influenced by organized labor and hostile to trade,” the paper announced. “Now that the Republicans are in the majority, all three trade agreements have better prospects–good news for the American companies and workers who would benefit from expanded exports, and for the American consumers who would benefit from more choices in the marketplace.” American workers, consumers, companies–EVERYONE–wins!

The Post added that the election in Ohio suggests “that anti-trade animus has a more limited audience than is commonly believed,” before summing up: “Trade, in short, may offer that rare policy area in which prospects for bipartisan cooperation improved on November 2. Mr. Obama would be wise to take advantage of that fact.”

The next day (11/8/10) an editorial in the New York Times was headlined ” South Korea Is a Start.” The Times started off: ” With protectionist policies gaining dangerous traction everywhere, the global economy needs a strong champion of free trade.” The election outcome might be just the thing: “Getting these trade deals through Congress won’t be easy, although Mr. Obama may find new allies in the Republican-controlled House. American trade unions, an important Democratic constituency, are decidedly unenthusiastic.” The Times cheered the “symbolic value of these agreements,” mostly as an antidote to “protectionism.”

Andover at the L.A. Times (11/6/10), the paper’s editorial page declared that “Tuesday’s takeover of the House of Representatives by the GOP raises hopes for progress on at least one important initiative: It might help President Obama win approval of a U.S./ South Korea free-trade pact.”

The L.A. Times laments the fact that Obama is trying “appease” U.S. automakers who complain about lack of access to the Korean market, and “ranchers who fret” about the Korean restrictions on U.S. beef. (Funny that papers champion “free” trade but scold those who argue that free trade deals aren’t,in fact, “free.”) The paper lectures that it is “improbable that U.S. labor unions will ever support the deal–and where organized labor leads, the Democratic Party tends to follow.” One more point: the Times argues that while it is “questionable whether Obama will have the political courage to upset the Democrats’ political base by seriously pushing for the trade deal,” it holds out hope that maybe this will be Obama’s moment to shine: “But if only Richard Nixon could go to China, it may be that only Obama, with his labor credentials, could get away with opening our markets to South Korea.”

Explaining why these trade deals are unambiguously good is rarely, if ever, necessary in the corporate media–they just are, because the goal is “free trade,” and who could be against that? To hear (or read) an argument about why such trade policies might not in fact be a win for U.S. workers or consumers, check out Todd Tucker from Public Citizen on CounterSpin (9/24/10).

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Activism Director and and Co-producer of CounterSpinPeter Hart is the activism director at FAIR. He writes for FAIR's magazine Extra! and is also a co-host and producer of FAIR's syndicated radio show CounterSpin. He is the author of The Oh Really? Factor: Unspinning Fox News Channel's Bill O'Reilly (Seven Stories Press, 2003). Hart has been interviewed by a number of media outlets, including NBC Nightly News, Fox News Channel's O'Reilly Factor, the Los Angeles Times, Newsday and the Associated Press. He has also appeared on Showtime and in the movie Outfoxed. Follow Peter on Twitter at @peterfhart.

The following criticism of the South Korean “free trade” deal comes from this article.

“This trade-off holds no promise for workers or small farmers in either the United States or South Korea, and this doesn’t change even if the [U.S.] auto or beef industry succeeds in forcing a renegotiation of the agreement. Opening markets only means more intense competition and downward pressure on worker wages. The experience of past decades of trade liberalization should be proof enough. A case in point: both U.S. and Chinese workers have seen their working and living conditions deteriorate while dominant transnational corporations and their national allies in both countries have gained enormous profits. …

“The president claims that working people will benefit from the agreement. Beyond misguided confidence in the ‘magic of the market,’ the only justification for this statement is the analysis of the FTA by the U.S. International Trade Commission, which concluded that it would likely raise U.S. GDP by $10.1ÃƒÆ’Â¢ÃƒÂ¢”Å¡Â¬“$11.9 billion. This is basically a rounding error in an economy with a GDP of over $14 trillion. Moreover, believe it or not, this conclusion is based on modeling that assumes full employment and balance-of-payments equilibrium in both economies, and no shifts in foreign investment from one to the other. This kind of work is not serious social science — it is ideological cover for a corporate agenda.

“Although trade is getting all the attention, this agreement covers more than tariff levels. As in all U.S. free trade agreements, this one contains many chapters dealing with labor, government procurement, services, investment, intellectual property rights, and dispute settlement. These…have one clear aim: weakening public power and strengthening corporate power. Here are some examples:

“The government procurement chapter would essentially limit the ability of any state entity to take into account “non-economic” factors in making spending or purchasing decisions. More specifically, governments would no longer be able to privilege companies that had exemplary labor or environmental records, or were locally owned or committed to using local labor.

“The investment chapter would grant foreign investors important new rights. In particular, foreign corporations would be able to directly sue governments (local, state, or national) if they introduced new laws or regulations that, in their opinion, reduced their ability to profit from a pre-existing business opportunity. And they could choose to have the suit heard in a foreign tribunal by experts without regard to existing national laws.

“A number of interwoven mandates from several chapters take dead aim at the public provision of health care. This is especially threatening to South Koreans who currently have such a system. These mandates would also make it much harder to create such a system in the United States. Among other things, the FTA provides for the establishment of special economic zones in South Korea where private U.S. insurance companies could set up operations under favorable conditions, thereby undermining the universal coverage and viability of the existing national public insurance system.

“Even more deadly, several chapters…have the potential to bust South Korea’s health cost-control system. Currently, South Korea has a positive drug list, which is a listing of generic, low-cost drugs that the government believes are medically effective and which its insurance will cover. The FTA provides U.S. pharmaceutical corporations with [ways] to demand that their higher priced drugs be placed on the list. Such an outcome would put a huge financial strain on the country’s health care budget, potentially leading the government to abandon its public commitment. …

“The agreement also contains financial deregulation provisions that would restrict South Korea as well as the United States from using capital controls to regulate ‘hot money’ flows. While the U.S. government remains unwilling to consider such an option, the South Korean government currently employs such controls on the rapid movement of speculative capital. Do we really want to legally forbid their use, especially given our recent history of speculative excesses?

“This is far from an exhaustive list of concerns. But even this brief list demonstrates that this agreement advances corporate power and profitability at the expense of public needs and capacities. It is far more than a commitment by two governments to reduce some tariffs.”

Until we are swimming in a sea of red ink and tears, I think we will not wake up. By then there will be no ships headed our way except to load up and cart off the last of our resources. And we can gut the military as not a shot will be fired. The corporations will own the defence department.

Until we are swimming in a sea of red ink and tears, I think we will not wake up. By then there will be no ships headed our way except to load up and cart off the last of our resources. And we can gut the military as not a shot will be fired. The corporations will own the Department of Defense

The free trade-loving economists base their faith (and it is akin to religious faith, especially in that it is immune to logic or experience) on the “Law of Comparative Advantage,” which assumes that capital is immobile.

Interesting comment, Jim S. Please expand on the “law of Comparative Advantage” if you will. From your breif discription I’m gathering that the idea is that all capital will be plowed back into the economy raising all boats, or something like that (guess I’ll have to google it now). I’m beginning to appreciate more and more the RWA (Right Wing Authortarian) aspect of being very conservative. It can be, as you point out, akin to religeous faith, which most all have in fundamentalist spades while refuting all facts to the contrary out of hand. A course determined for whatever reason is never subject to revision or reversal regardless of experience or contrary data. I managed a Coffee Shop once, and we had a dishwasher who did an amazingly competent job. Very presice and extreemly orderly until one day someone (not me) tried to explain to him that the silverware placement in cups for washing should be reversed so the eating surface would not be touched after drying for storage. That’s not the way he was trained and it was virtually impossible to retrain him. He was an Idiot Sauvant. I recognized him from the community where we grew up, and once he knew my name and made the connection, he, it turned out, new my parents names and address and the day he learned that they canceled their subscription to the daily newspaper he had delivered ten years previously; he could not, however, put any of his total recall to good use (not to discount the need for dishwashers).
President Obama is criticized by some for being too analytical and considering too many factors before deciding on a couse of action. Having experienced the results of President Bush’s metholology, I’ll take the latter. Logic and experience has demonstrated that Free Trade is not Fair Trade for America. We built the greatest middle class society on earth decades ago by valuing labor and by paying a fair price for it in the products we bought made in America (even while correcting the environmentally devastating practices of the past and cleaning up the resultant mess). Today we cut our collective throats borrowing the money to buy cheeper goods made by countries that do not value their labor or environment, gutting our infrastucture (and yes, Labor is a part of our infrastucture) in the process. Because American business put short term profits ahead of the economic long-term health of their own companies and the nation, we find ourselves needing social programs we may never have considered necessary before. Washington can either promote free trade while american companies become international companies offshoring labor costs and profits to countries with vastly lower standards of living (is this what you were referring to in the post above, Jim?); or it can prescribe Fair Trade and Fair Wage policies that will encourage companies (existing or new) to recognize that this nation of 350,000,000 affluent customers is worth reaching out to. Whenever I have had an opportunity to present this argument to any of my friends, be they right or left they’ve all agreed that paying a bit more for goods and services to regain a strong and viable America is well worth the price. Besides, If the goods (especially clothes) weren’t so cheap, there might even be a bit of breathing room in our walk-in closets and room for two cars in a two car garage.

N dave…..I think Bush and Obama were/are out of their depth on this not just because of the complexity of the problem… but on ideology..Bush hemmed in by his free market approach, and Obama by his oath to the unions.I remember chicken man saying about NAFTA -“that great sucking sound you hear is jobs going out of the country”.World competition arrived and we did not keep our eye on trade imbalances.It is as you say…everyone wants cheap sneakers. Unions have made us less competitive and corporations scramble without any eye to core values.So what is the answer?I believe in American exceptionalism pulling us out.Unleash this engine of the economy.Lowering our corporate tax rate from the highest in the industrial world will help.I need not tell you the reaction on the left of allowing people with their corporations getting wealthy again through success.
We must have unions understand the bottom line(teachers union being asked to pay 2% of their healthcare cost for instance)And I need not tell you how that is going to sit with the left.
WE must take off the chains hampering the development of new business.Again a big political price.On and on.We must compete in all that that means.And set the stage so we can compete.You are correct again in saying we must decide.Buy American would be an interesting experiment.Of course we are so in debt to the Chinese that our demands for parity in trade may sound like begging.WE should remember that we are twice as big as China and India together.We still are the big dog.We need to retool for success and not fear it.